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I was looking through the list of top % gainers on the AMEX today and came across an old 'favorite' of mine, Bolt Technology (BTJ), which I first reviewed on Stock Picks Bob's Advice on January 19, 2006, when the stock was trading at $17.86. As I write, Bolt is trading at $22.81, up $1.60 or 7.54% on the day. The stock is currently higher by $4.95 or 27.7% since I posted the stock here a little under a year ago. I do not own any shares of Bolt nor do I own any options on the stock.
What does this company do?
According to the Yahoo "Profile" on Bolt, the company
"...through its subsidiaries, engages in the development, manufacture, and sale of seismic energy sources used in the seismic exploration for oil and gas worldwide. The company operates in two segments, Geophysical Equipment and Industrial Products. The Geophysical Equipment segment offers marine seismic energy sources and underwater electrical connectors and cables, seismic source monitoring systems, air gun signature hydrophones, and pressure transducers used by the marine seismic industry. The company’s Industrial Products segment offers miniature industrial clutches, brakes, and sub-fractional horsepower electric motors."
How did they do in the latest quarter?
On October 24, 2006, BTJ announced 1st quarter fiscal 2007 results. Sales for the quarter ended September 30, 2006, climbed 25% to $10.0 million, up from $8.0 million in the same period last year. Net income grew 96% to $2.0 million or $.35/share, up from $1.02 million or $.18/share in the year earlier same period.
What about longer-term results?
Reviewing the Morningstar.com "5-Yr Restated" financials, we can see that the company did have a drop in revenue from $18 million in 2002 to $11 million in 2003. However, since then Bolt has been growing its revenue steadily to $19 million in 2005 and $33 million in 2006. Similarly, earnings dropped from $.35/share in 2002 to a loss of $(.03)/share in 2003. However, the company was once again profitable in 2004 at $.16/share, and has grown earnings strongly since with $.30/share reported in 2005 and $.86/share in 2006. The number of shares outstanding has been fairly stable (and small) with 5 million in 2002, 5 million in 2006, and 6 million in the trailing twelve months (TTM). No dividend is reported.
Free cash flow, while small, has been positive at $1 million in 2004 and $1 million in the TTM.
The balance sheet looks solid to me with $4.6 million in cash and $16.3 million in other current assets, giving us a total of $20.9 million in current assets, which easily covers botht the $5.8 million in current liabilities and the small $.4 million in long-term debt. Dividing this out yields a current ratio of 3.6.
What about some valuation numbers?
Reviewing Yahoo "Key Statistics" on Bolt (BTJ) we see that this is a small "small cap" company with a market capitalization of only $125.38 million. The trailing p/e is a reasonable (imho) 21.74. No PEG is reported, but if the current growth in earnings were to continue, the PEG would certainly be well under 1.0.
Checking the Fidelity.com eresearch website, we can see that the Price/Sales (TTM) ratio works out to 3.39 with an industry average of 3.42. The Return on Equity (ROE) is reported at 21.15%, slightly below the industry average of 29.93% per Fidelity.
Finishing up with Yahoo, we can see that there are only 5.59 million shares outstanding and 5.13 million that float. As of 11/10/06, there were only 54,890 shares out short, representing 1.10% of the float or 0.5 trading days of volume....not a very significant short interest at all.
As noted, no stock dividends are reported, and Yahoo does not report any stock splits either.
What about the chart?
If we look at a "Point & Figure" chart from Stockcharts.com on BTJ, we can see that the stock, which was trading around $2.75 to $4.50 between much of 2002 to 2004, moved sharply higher late in 2004 and into early 2006 to the $19.00 range. More recently, the stock once again appears to be moving higher into new territory. The chart looks interesting to me!
Summary: What do I think about the stock?
Well, if I didn't like it I wouldn't be writing it up again :). Seriously, the stock looks interesting. It is a tiny company that is dependent on the oil service industry but unless the entire oil market collapses, it appears this company may well be a good performer. Valuation isn't bad, and the Morningstar.com report is attractive. If I were in the market to be buying a stock, this is the kind of stock I would be buying today!
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